Weekly Update: New Year… Same Story
Good evening, and welcome to this week’s edition of Stealth Trades!
Well, new year… same story.
After a hideous 2022, stocks started the year off with more selling (shocker, I know).
A small rally on Friday allowed the index to get roughly flat for the week, but it is still trading within spitting distance of new lows.
Finding winning stocks is, to say the least, difficult at the moment.
But this is always the case in a bear market.
But there are still some high-flyers to be found…
I’m talking about stocks in such tremendous uptrends, the general market has almost no bearing on their movement.
I call them honey badger stocks. You might remember the viral video from a few years back… “Honey badger don’t care!”
In the same sense, these stocks do not care whether the index is moving up or down. They move to the beat of their own drum. And catching these power moves can deliver huge profits.
Here are few of my favorite honey badgers right now:
Immunovant (IMVT)
Immunovant is a biotech company developing therapies for patients living with autoimmune diseases.
This uptrend is about as pretty as it gets.
After doubling in a week in early October, the stock formed a tight consolidation and then broke out to new highs.
It has been riding its 10-day moving average (yellow line) for three months with almost no retracement.
With a stock like this, I like to buy any pullbacks to the 10-day EMA and place a stop beneath the 21-day (blue line). It keeps risk at less than 10% while still allowing me to participate in what can be a powerful move higher.
CymaBay Therapeutics (CBAY)
CBAY is another biotech stock making a huge move right now.
It is one of the small handful of breakouts that have played out as expected and followed through to the upside.
As of Friday morning, the stock is pulling back to its 10-day exponential moving average.
This is a good low-risk spot to place a long trade with a 6-7% stop.
iQIYI (IQ)
IQ is a Chinese streaming service similar to Netflix.
I tend to stay away from Chinese stocks for a number of reasons, but this one is hard to ignore.
Shares are up 245% in the last two months with minimal retracement along the way.
It got a bit extended from its 10-day moving average last week, but I would consider buying on a pullback to it.
Best wishes for your trading,
Ross Givens
Editor, Stealth Trades